Advanced Micro Devices (NASDAQ:AMD) has been on fire as demand for its graphics cards and processors has increased and new and improved products have helped the company take market share from bigger rivals. Shares of the chipmaker have more than doubled in the past year, driven by rapid growth in the company's top and bottom lines and the promise of better times ahead.

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However, investors may find AMD stock too expensive for their tastes, as it trades at nearly 11 times sales and 105 times trailing earnings. But if you're looking for an emerging company that's clocking rapid growth and trading at a much cheaper valuation than AMD, Corsair Gaming (NASDAQ:CRSR) could turn out to be a good choice. Here's why.

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Corsair Gaming's rapid growth is here to stay

It has been less than two months since Corsair Gaming made its stock market debut, and shares of the company have nearly doubled already thanks to strong demand for its gaming-oriented products.

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The company -- known for making video game hardware and peripherals -- reported spectacular numbers for the third quarter of 2020, delivering terrific growth across key metrics. Its revenue increased 60.7% year over year to $457.1 million, and gross margin jumped 680 basis points. Corsair's adjusted operating income shot up 194% to $61.4 million, while non-GAAP net income came in at $48.5 million, compared to $10 million a year ago.

Corsair Gaming divides its revenue into two segments: gamer and creator peripherals, and gaming components and systems. Under gamer and creator peripherals, the company sells products such as gaming keyboards, mice, controllers, headsets, and other streaming equipment such as capture cards and microphones.

The segment's revenue was up nearly 129% year over year during the quarter to $161.6 million, accounting for 35% of the total revenue. This is a high-margin business for Corsair, delivering a 37.1% gross margin last quarter, compared to the 28% margin of the component and systems business.

More importantly, Corsair could rely on the gamer and creator peripherals business to drive sustained growth in the future thanks to the fast-growing e-sports market. According to third-party estimates, the global e-sports market could clock a compound annual growth rate of over 24% through 2027. As a result, demand for video game streaming equipment and other peripherals is anticipated to increase in the coming years, adding nearly $2.8 billion worth of revenue over the next four years according to third-party estimates.

Corsair claims that it has an 18.3% share of the peripheral market, indicating the company's gamer and creator peripherals revenue could increase substantially. On the other hand, Corsair Gaming pointed out that it controlled 41.9% of the PC (personal computer) components market in 2019, citing data from Jon Peddie Research.

This bodes well for Corsair's gaming components business, which includes sales of equipment such as computer cases, RAM (random access memory), cooling solutions, power supply units, and pre-built PCs. Jon Peddie Research predicts that the PC gaming hardware market could add $3.6 billion in revenue this year, hitting a total size of $40 billion thanks to shelter-in-place orders triggered by the COVID-19 crisis in the first half of 2020.

It wouldn't be surprising to see the market sustain its momentum in the future as well because of next-generation gaming hardware launched by the likes of NVIDIA and AMD.

Why you should be buying the stock

Corsair seems well-positioned to benefit from long-term growth trends in the gaming hardware market, making it an ideal bet for investors looking to buy a relatively cheaper stock than AMD. Corsair trades at 80 times trailing earnings and has a forward price-to-earnings (P/E) multiple of 26. Its price-to-sales ratio of 1.91 is also much lower than AMD, and compares favorably with peer Logitech International's multiple of 4.3x.

Corsair Gaming aims to finish 2020 on a high, with an estimated revenue of $1.6 billion, an increase of 45% over 2019 levels. A look at different Wall Street calls and analyst estimates compiled by Yahoo! Finance indicate that Corsair could sustain a high earnings growth rate in the long run -- which could help it remain a top growth stock.